NewsWatch: Summary of Top Stories -6-18-98

CBS.MarketWatch.com

NEW YORK (CBS.MW) -- U.S. stocks wandered lower Thursday, with an absence of market-moving events lending a calm tone to market proceedings after the gyrations of the past week. The action occurred a day before Friday's quarterly expiration of options and futures contracts. "A lot of our indicators are still in oversold condition and so it's hard to tell yet [whether the market has definitively bottomed]," said Louise Yamada, technical analyst at Salomon Smith Barney. "In terms of a wider consolidation or corrective trend, we rather suspect that this could go on for weeks to months."

SAN FRANCISCO (CBS.MW) -- The Walt Disney Company said it is taking a 43 percent stake in Internet search engine company Infoseek(SEEK)
SEEK, +900.00%
, buying the Magic Kingdom more World Wide Web viewers for services such as ABCNEWS.com, ESPN.com and Mrshowbiz.com. (See also: .) Disney said it will give Infoseek $70 million in cash, plus its shares in Starwave, a privately held Web site design firm. The pact also involves warrants that could give Disney a majority stake in Infoseek over the next three years.

Iomega warns it will miss expectations . . .

ROY, Utah (CBS.MW) --Iomega Corp. (IOM)
IOM, +2.44%
faces a rocky trading session Friday after the beleaguered disk drive manufacturer said it will post a loss in the second quarter and may fall out of compliance with its loan agreements. The company sees a loss of 10 to 13 cents a share. Analysts were expecting a loss of 3 cents a share. Iomega forecast second-quarter revenue flat with first-quarter sales of $408 million. In the same period a year ago, Iomega earned 9 cents a share on revenue of $400 million.

BOISE, Idaho (CBS.MW) -- Shares of Texas Instruments Inc. could rise Friday after the company said it will sell its semiconductor memory operations to Micron Technology in a deal worth $800 million. TI (TXN), which has been gradually exiting the memory business for the past six months, will sell its manufacturing assets as well as its minority stakes in two joint DRAM manufacturing ventures to Micron (MU)
MU, +0.68%
.

WASHINGTON (CBS.MW) -- The U.S. trade gap soared to $14.5 billion in April, the highest since monthly records began in 1992, the Commerce Department said. The increase in the deficit in traded goods and services was widely expected by economists as a consequence of the Asian economic crisis and a strong dollar. The Asian crisis is hurting U.S. trade in two ways: The recession is reducing demand for U.S. goods in Asia and the currency devaluations are making Asian goods cheaper relative to U.S. goods in every market around the world.

House votes to kill tax code by 2002 . . .

WASHINGTON (CBS.MW) -- The U.S. House of Representatives voted to abolish the current tax code by Dec. 31, 2002, but the bill faces an uphill battle in the Senate and is unlikely to become law. The bill was narrowly approved in the Republican-controlled House by a 219 to 209 margin late Wednesday. It directs a future Congress to design a new tax code by July 4, 2002. The nonbinding bill does not specify what a new tax code should look like.

Mortgage rates dip to 6.94 percent . . .

SAN FRANCISCO (CBS.MW) -- Fixed mortgage rates dropped to their lowest levels since January this week as U.S. Treasury bond yields
TYX, -1.12%
flirt with their lowest levels ever. The 30-year fixed mortgages dropped to 6.94 percent from 7.04 percent a week ago, its lowest level since Jan. 16, Freddie Mac reported. Average 15-year fixed mortgages fell to 6.62 percent from 6.71 percent a week ago, while the one-year adjustable rate dipped to 5.68 percent from 5.71 percent.

NEW YORK (CBS.MW) -- America Online (AOL)
aol
gave notice Thursday it may seek to raise as much as a billion dollars for corporate purposes. In filing a universal shelf registration statement with the Securities and Exchange Commission, the company said it may sell unsecured debt or shares of preferred or common stock. In the federal form S-3 document, AOL said its mission "is to become the recognized leader in the global interactive medium that is changing the way people communicate, stay informed, are entertained, learn, shop and do business."

NEW YORK (CBS.MW) -- Shares of British software company Micro Focus fell after the company said it will acquire Intersolv in a deal valued at about $534 million. Micro Focus (MIFGY)
mifgy
will issue approximately 14.4 million American Depositary Shares, representing approximately 72 million new shares, to acquire the smaller company (ISLI)
isli
. The companies, which make software development tools, have combined sales over the past year of $375 million.

StockWatch: Small-cap heaven for some investors . . .

SAN FRANCISCO (CBS.MW) -- Some investors this week will be in small-cap heaven. The folks at Portland, Ore., Red Chip Review are staging a New York gathering of 20 of the fastest growing companies in the U.S. stock market. That's on Friday. Red Chip's stable of analysts are beholden to no brokerage houses or investment banks. Instead, they spend their days discovering companies with 46 percent annual compound growth rates, like New Mexico's SBS Technologies (SBSE)
sbse
, a maker of computer parts for the aerospace industry.

Erdman's World: Rubin nominated for MVP . . .

NEW YORK (CBS.MW) --The clear favorite for MVP in the financial world cup competition is the American striker, Robert (Bobbie) Rubin. Lurking near the goal while trying to appear as invisible as possible, he took a pass from teammate, Lawrence (Larry) Sommers, and scored a tremendous goal against the Hungarian team coached by George Soros.The element of surprise played a key role. The Hungarians had thoroughly demoralized the American team with very tricky passing, known in Budapest as "the carry trade."

NEW YORK (CBS.MW) -- Let's call this column the Clueless Analyst. It was only a little more than a week ago that we saw "buy" ratings from all four analysts working at the investment banks that brought telecommunications software and service provider Evolving Systems (EVOL)
EVOL, -7.33%
to the market in a hot May IPO. On Thursday, Evolving's stock crumbled by 40 percent after the company warned that it expects to report a loss for the quarter of 10 cents to 15 cents a share, including a one-time charge for the retirement of some debt. Analysts had been expecting a profit of about 5 cents a share.

Soapbox: Second quarter earnings look grim . . .

NEW YORK (CBS.MW) -- The end of the second quarter is less than two weeks away, and companies are warning that Asia's economic crisis has taken a bigger bite out of corporate America's bottom line than expected. Normally 57 percent of all U.S. companies warn that earnings will be below expectations. The second quarter isn't even over, and already 65 percent of all U.S. firms have warned that earnings will be below par. CBS MarketWatch spoke to Chuck Hill, director of research for First Call, about second quarter earnings.

Moscow: Russia puts off bond auction . . .

MOSCOW (CBS.MW) -- The Russian government canceled its scheduled bond auctions, shunning the volatile domestic bond market after apparently finding the cash to pay its debt obligations from external sources. Investors were watching the auctions as the latest bellwether of the health of the Russian economy. For five straight weeks, the central bank has had to shell out hard currency reserves because demand at the auctions has been nonexistent.

Kellner: Japan's woes border on depression . . .

NEW YORK (CBS.MW) -- Despite dropping more than 10 percent against the U.S. dollar this year to an eight-year low, the Japanese yen isn?t likely to reverse direction any time soon. This is because the Japanese economy, which the yen reflects, is extremely weak and getting weaker day by day. Indeed, it is not unreasonable to compare Japan today with the U.S. in the early 1930s, at the start of the Great Depression:

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